[Federal Register Volume 65, Number 45 (Tuesday, March 7, 2000)]
[Rules and Regulations]
[Pages 11898-11904]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-5388]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 86

[AMS-FRL-6545-7]


Optional Certification Streamlining Procedures for Light-Duty 
Vehicles, Light-Duty Trucks, and Heavy-Duty Engines for Original 
Equipment Manufacturers and for Aftermarket Conversion Manufacturers; 
Final Rule

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: The Environmental Protection Agency (EPA) is adopting a fee 
waiver provision for vehicles certified with ``closed'' fuel systems 
and for vehicles certified to the Clean-Fuel vehicle (CFV) standards. 
EPA is also adopting a provision for calculating eligibility for a 
partial fee waiver for vehicles converted to operate on a gaseous fuel. 
EPA proposed this provision in a Notice of Proposed Rulemaking (NPRM) 
published on July 20, 1998, at 63 FR 38767, to provide incentives for 
the manufacturer of CFVs by easing the burden of certification for 
manufacturers of these vehicles. EPA is not adopting certain other 
provisions proposed in that document.
    The fee waivers adopted today will be effective for the 2000 Model 
Year (MY) and will continue through MY 2003. This action will reduce 
the cost of certification for manufacturers certifying a small-volume 
engine family to CFV standards. In addition, it is anticipated this 
action will provide a financial incentive for automobile and engine 
manufacturers to increase the number of offerings of alternatively 
fueled vehicles to private owners and fleet owners. Manufacturers who 
qualify for the fee waivers and who have already paid their fees for 
2000 MY vehicles will be eligible for a complete refund. EPA estimates 
that overall manufacturers will save about $100,000 during each of the 
next four model years due to this provision.

EFFECTIVE DATE: This rule is effective April 6, 2000.

ADDRESSES: Materials relevant to this final rule are contained in 
Docket No. A-97-27, located at the Air Docket, 401 M Street SW, 
Washington, DC 20460, and may be reviewed in Room M-1500 from 8 a.m. 
until 5:30 p.m. on business days. The telephone number is (202) 260-
7548 and the facsimile number is (202) 260-4400. As provided in 40 CFR 
Part 2, EPA may charge a reasonable fee for photocopying docket 
materials.

FOR FURTHER INFORMATION CONTACT: Mr. Clifford Tyree, Senior Project 
Manager, U.S. EPA, National Vehicle and Fuel Emission Laboratory, 
Vehicle Programs and Compliance Division, 2565 Plymouth Road, Ann 
Arbor, MI 48105-2425. Telephone: (734) 214-4310; FAX 734-214-4053. E-
Mail, [email protected].

SUPPLEMENTARY INFORMATION:

Regulated Entities

    Entities potentially regulated by this action are Original 
Equipment Manufacturers (OEMs) of Light-Duty Vehicles, Light-Duty 
Trucks (LDTs), and Heavy-Duty Engine (HDEs) manufacturers. In addition, 
aftermarket converters of LDVs, LDTs, and HDEs will also be regulated. 
Entities include:

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                Category                  Examples of regulated entities
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Auto industry of light-duty vehicles,    Original Equipment
 light-duty trucks, and heavy-duty        Manufacturers (OEMs) and
 engines.                                 Aftermarket Converters.
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    This table is not intended to be exhaustive, but rather provides a 
guide for readers regarding entities likely to be regulated by this 
action. This table lists the types of entities that EPA is now aware 
could potentially be regulated by this action. Other types of entities 
not listed in the table could also be regulated. To determine whether 
your

[[Page 11899]]

product is regulated by this action, you should carefully examine the 
applicability criteria in Sec. 86.094-1 of title 40 of the Code of 
Federal Regulations. If you have questions regarding the applicability 
of this action to a particular product, consult the person listed in 
the preceding FOR FURTHER INFORMATION CONTACT section.

Obtaining Electronic Copies of the Regulatory Documents

    The preamble, regulatory and other related documents are also 
available electronically from the EPA Internet Web site. This service 
is free of charge, except for any cost you already incur for Internet 
connectivity. The electronic Federal Register version is made available 
on the day of publication on the primary Web site listed below. The EPA 
Office of Mobile Sources also publishes Federal Register notices and 
related documents on a secondary Web site listed below.
    1. http://www.epa.gov/docs/fedrgstr/EPA-AIR/(either select desired 
date or use Search feature.)
    2. http://www.epa.gov/OMSWWW/cff.htm

    Please note that due to differences between the software used to 
develop the document and the software into which the document may be 
downloaded, changes in format, page length, etc. may occur.

Table of Contents

I. Introduction
II. Content of the Final Rule
    A. Definition of Dedicated Vehicle (or Engine)
    B. Engine Family Criteria and Assigned Deterioration Factors
    C. Fees
III. Projected Impacts
    A. Environmental Impact
    B. Economic Impact
IV. Public Participation
V. Administrative Requirements
    A. Administrative Designation and Regulatory Analysis
    B. Regulatory Flexibility Act
    C. Paperwork Reduction Act
    D. Unfunded Mandates Reform Act
    E. Congressional Review Act
    F. National Technology Transfer and Advancement Act
    G. Protection of Children
    H. Enhancing Intergovernmental Partnerships
    I. Consultation and Coordination With Indian Tribal Governments
    J. Executive Order 13132, Federalism Policies
VI. Statutory Authority

I. Introduction

    The goal of the proposed amendments was to ease the burden of 
certification for manufacturers of vehicles and engines certified with 
closed fuel systems and for manufacturers of Clean-Fuel vehicles (CFV), 
to increase the supply of such vehicles. This overall increase in the 
supply of such vehicles will also result in a broader selection of 
vehicles certified to CFV standards for fleet operators subject to the 
purchasing requirements of state Clean-Fuel Fleet Programs (CFFP) under 
section 246 of the Clean Air Act. EPA proposed to (1) Revise the 
definition for dedicated vehicle (or engine) in 40 CFR 86.092-90 to 
include CFVs with limited ability to operate on a conventional fuel, 
(2) amend the current regulations to allow manufacturers of CFVs to 
group certain engine families together for certification purposes, and 
(3) exempt certain manufacturers for MY 1999, 2000, and 2001, from 
certification fees for vehicles with closed fuel systems and for CFVs.

II. Content of the Final Rule

A. Definition of Dedicated Vehicle (or Engine)

    EPA is not adopting the proposed changes to the definition of a 
dedicated vehicle (or engine) for the reasons described below. EPA 
received four comments expressing support for this provision, but also 
expressing concern that the proposed definition would add complexity 
and confusion for the consumer.
    EPA proposed to revise the current definition of dedicated vehicle 
(or engine) to encompass vehicles with limited ability to operate on a 
second fuel. The emergency fuel supply of the second fuel would be 
limited to a fuel capacity that would only allow a 50-mile range or, 
operation for one hour in three hours of driving. Some commenters felt 
strongly that the operators would find a way to circumvent the 
limitations on the use of the second fuel. For example, the electronic 
limit of one hour of operation in three could easily be tampered with. 
They also felt that some operators would choose to operate on the 
gasoline in non-emergency situations, even if the total capacity would 
only allow a 50-mile range.
    EPA received several comments arguing that any vehicle called 
``dedicated'' should only be capable of operating on one fuel. They 
stated that the option of an emergency fuel supply within the 
definition of ``dedicated'' would erode consumer knowledge and 
understanding of the work they have accomplished in producing vehicles 
which would not have the emergency fuel supply.
    EPA has considered the comments received and concludes that it is 
best to keep the current definition of dedicated vehicle (or engine) 
intact and, therefore, the proposed change is not being adopted today. 
EPA believes that at this time it cannot ensure that amending the 
definition of dedicated vehicle as proposed will not result in consumer 
confusion about alternative fueled vehicles. Therefore, vehicles with a 
limited ability to operate on a second fuel will continue to be 
considered dual-fueled vehicles.

B. Engine Family Criteria and Assigned Deterioration Factors

    In light of recently adopted amendments to EPA's certification 
regulations EPA has decided not to adopt the proposed engine family 
criteria and assigned deterioration factors (DFs) proposed in the NPRM. 
\1\ The flexibility that would have been provided by the proposed 
definition of ``Engine Family Class'' is for the most part encompassed 
in the ``Durability group determination'' and the ``Test group 
determination'' provisions of the CAP 2000 amendments.\2\\,\\3\ Because 
the CAP 2000 amendments provide the majority of relief proposed for 
light-duty vehicles, it is unnecessary to adopt the proposed 
provisions.
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    \1\ 40 CFR Part 9 et al.; Control of Air Pollution From New 
Motor Vehicles; Compliance programs for New Light-Duty Vehicles and 
Light-Duty Trucks; Final Rule, 85 FR 23905, May 4, 1999 (the ``CAP 
2000'' regulations).
    \2\ 40 CFR 86.1820-01 ``Durability group Determination''
    \3\ 40 CFR 86.1827-01 ``Test group Determination''
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    The CAP 2000 rules do not apply to heavy-duty engines and the 
proposed durability requirements would have required specific 
durability data submissions for heavy-duty engines. Some commenters 
stated that the proposed changes were more restrictive than current 
regulations, therefore the heavy-duty manufacturers would not likely 
exercise the options that would be provided by the proposed provisions. 
Since the changes would have been optional and because it appears 
unlikely the heavy-duty engine manufacturers would use the options that 
would have been provided by the proposed provisions, EPA has decided 
not to adopt the proposed changes for heavy-duty engines.
    Several commenters noted that a 1995 EPA guidance document (CD-95-
14), would expire with the 2000 MY. This Agency guidance document 
provided assigned deterioration factors for gaseous-fueled vehicles and 
engines for small-volume manufacturers as provided in 40 CFR 86.094-
14(a)(2) and 86.094-14(c)(7)(i)(C). The commenters noted that the 
Agency has previously indicated its intent to extend the

[[Page 11900]]

applicability of the assigned deterioration factors to reflect both the 
new sales-volume limit for small-volume manufacturers as provided in 
the CAP 2000 provisions and to include assigned deterioration factors 
for heavy-duty engines qualified to use additive deterioration factors. 
EPA did not indicate in the NPRM any intent to revise this guidance. 
This issue is outside the scope of today's action, and EPA intends to 
address this issue in a separate context.

C. Fees

    EPA is finalizing the proposed fee waiver provisions, for the 
reasons described below and in the NPRM. Every commenter addressing the 
fees issue supported this proposed amendment.
    Several commenters who supported EPA's proposal recommended 
expanding the scope of the fee waiver. One fleet operator recommended 
the fee waiver be extended indefinitely. One commenter wanted the fee 
waiver to be retroactive to the date of the Notice of Proposed 
Rulemaking, July 20, 1998. One commenter wanted all of the 1999 model 
year fees to be refunded for all alternative fueled vehicles. For the 
reasons described below, EPA is finalizing the proposed fee waiver for 
MY 2000 vehicles and engines meeting LEV or better emissions standards, 
and for MY 2000 dedicated gaseous fuel vehicles and engines. In 
addition, EPA is adopting a provision through which manufacturers who 
have certified such vehicles for MY 2000 can seek a refund of 
certification fees. Finally, EPA is extending the fee waiver through MY 
2003, two years beyond the proposed waiver.
    EPA disagrees with the commenter who recommends the fee waiver be 
extended indefinitely. The purpose of the fee waiver is to encourage 
manufacturers to produce and certify clean fuel vehicles, and gaseous 
fueled vehicles, as described in the NPRM. EPA does not believe that it 
is necessary or appropriate to provide a fee waiver beyond a specific, 
short-term time period as an incentive to manufacturers. Once clean 
fuel vehicles and gaseous fueled vehicles are certified and in use, it 
is reasonable to expect that consumers, including fleets, will continue 
to provide a market for such vehicles. Therefore, an indefinite or 
significantly longer term fee waiver is not needed.
    EPA also does not believe it is appropriate to make the fee waiver 
and refunds retroactive to MY vehicles before MY2000. While EPA 
believes it is appropriate to provide a short-term fee waiver for 
certain vehicles for the reasons described in the NPRM, to the extent 
manufacturers certified clean fuel vehicles and gaseous fueled vehicles 
in prior model years, they clearly believed it was a wise business 
decision to do so even without the incentive provided by a fee waiver 
or refund. Since the purpose of the waiver is to encourage 
certification of such vehicles, that purpose is not served by refunding 
or waiving fees from prior model years.\4\
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    \4\ As described below, EPA is providing an opportunity for 
certain manufacturers to request a refund of fees for MY 2000. This 
is to provide equity for all manufacturers of similar vehicles for a 
particular model year, and therefore the reasoning for this limited 
refund provision does not support extending the refund to prior 
model years. In addition, EPA's calculation of fees that could be 
refunded for MY 2000 under the provision adopted today shows that 
the total possible amount that could be refunded is relatively small 
(less than $75,000).
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    EPA received comments requesting the fee waiver extend at least 
through MY 2004. One commenter indicated that original equipment 
manufacturers (OEMs) plan for model year introduction 3 and 4 years in 
advance, and therefore it is appropriate for EPA to waive certification 
fees for those vehicles and engines which manufacturers are currently 
beginning to develop. Commenters also noted that EPA's emission 
standards are expected to be revised beginning with MY 2004, making a 
fee waiver through this period a convenient bridge to the new 
standards.
    EPA is adopting a fee waiver provision for clean fuel vehicles and 
dedicated alternative fuel vehicles that applies through MY 2003. EPA 
is aware that certain fleets continue to experience difficulty in 
obtaining appropriate clean fuel vehicles to meet fleet program 
purchase requirements. Moreover, further development of the alternative 
fuel refueling infrastructure would help enable such fleets to have a 
broader choice of qualifying vehicles from which to choose. For these 
reasons, EPA proposed a fee waiver to extend for three model years (MY 
1999-2001). Based on the effective date of today's action, a three-
model-year fee waiver provision adopted today would apply through MY 
2002. EPA believes that it is appropriate to extend the waiver 
provision for an additional model year, to encourage manufacturers to 
begin development of clean fuel vehicles and dedicated alternative fuel 
vehicles for introduction into commerce in the future. Those 
manufacturers who do need four years to plan for vehicle introduction 
are thus assured of a fee waiver for MY 2003.
    EPA disagrees with commenters who recommended the fee waiver extend 
at least through MY 2004, to provide a bridge to implementation of 
EPA's Tier 2 standards. As described in this notice and in the NPRM, 
the fee waiver is primarily intended to encourage manufacturers to 
certify and produce vehicles and engines to meet the purchase 
requirements of fleet operators subject to clean fuel fleet program 
purchase requirements. It was not proposed as a means to facilitate 
implementation of new emissions standards. For this reason, and because 
EPA believes a four-model-year period is sufficient to provide an 
initial encouragement for the production of clean fuel vehicles and 
dedicated alternative fuel vehicles, EPA is not extending the fee 
waiver beyond MY 2003.
    Several commenters wanted the fee waiver to apply to flexible- and 
dual-fuel vehicles. EPA is finalizing the proposal to waive fees for 
dedicated Tier 1 gaseous fueled vehicles, for the reasons described in 
the NPRM. EPA is not including Tier 1 flexible- and dual-fuel vehicles 
in the full fee waiver because EPA cannot ensure the vehicles will be 
operated using the alternative fuel. However, as described below, EPA 
believes it is appropriate to provide a more limited incentive for 
manufacturers to certify such vehicles.
    One commenter claimed the need to include flexible- and dual-fuel 
vehicles is consistent with the Congressional intent under Energy 
Policy Act (EPAct) to reduce dependency on foreign oil. This fee waiver 
is not intended to further the purposes of EPAct, which is a statute 
administered by the Department of Energy (DOE). Also, for the reason 
already stated in the NPRM and above, the fee waiver will apply only to 
dedicated fuel systems.
    EPA's fee waiver proposal was issued in July 1998, and, at that 
time, EPA expected the fee waiver would begin to apply no later than MY 
2000, based on the expected date of promulgation of the final rule. 
However, due to the delay in taking final action on the proposed 
provisions, some manufacturers have already certified vehicles to the 
Low-Emissions Vehicles (LEV), Inherently-LEV (ILEV), Ultra LEV (ULEV), 
or Zero-Emissions Vehicles (ZEV) emissions standards for MY 2000. EPA 
is adopting a provision to refund the certification fees paid for such 
vehicles, as well as any dedicated gaseous fueled Tier 1 vehicles, to 
provide equity in charging of fees in MY 2000. EPA does not want to 
penalize those manufacturers who certified these cleaner vehicles early 
in the model year, prior to promulgation of

[[Page 11901]]

these regulations. Therefore, manufacturers of such vehicles can 
request a refund of certification fees from EPA. This refund provision, 
in combination with the fee waiver provision, results in an 
appropriate, equitable, and nondiscriminatory fee schedule, for the 
reasons described in the NPRM, and because it avoids penalizing 
manufacturers who have already certified such vehicles for MY 2000.
    Several commenters noted a discrepancy between the preamble and the 
proposed rule. In the preamble, EPA clearly identified vehicles and 
engines with ``closed'' fuel systems certified to Tier 1 standards as 
eligible for a fee waiver.\5\ The proposed amendments to the regulatory 
language did not reflect this provision. This oversight is corrected in 
today's action and any vehicle or engine with a dedicated ``closed'' 
fuel system is eligible. A vehicle or engine with a dual-fuel system or 
flexible-fuel system would not be eligible for a fee waiver. Vehicles 
certified only to California emissions standards would also not be 
eligible for a fee waiver.
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    \5\ See 63 FR 38771.
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    One of the existing fee waiver provisions, found at 40 CFR 86.908-
93(a), provides a waiver from the full fee if the projected sales are 
anticipated to be such that a full fee would exceed 1% of the retail 
value. For example, if the retail sales price--based on the National 
Automobile Dealer's Association appraisal--is $25,000.00, then the 
manufacturer would pay 1% of this value or $250.00 for each vehicle 
until the maximum applicable fee is reached. Several commenters 
recommended EPA change the way the 1% value was determined. These 
commenters argued that the value added during the conversion process is 
the value that should be the basis of the 1% fee waiver calculations. 
EPA agrees that the calculation method for the one percent waiver in 
the current regulations often results in manufacturers paying the full 
certification fee for conversions where production volume exceeds 
approximately one hundred vehicles or engines. Under the regulations 
adopted today, conversions to clean fuel vehicles or to dedicated 
gaseous fueled Tier 1 vehicles would be eligible for a full fee waiver. 
However, conversions to dual-and flexible-fueled Tier 1 vehicles would 
not. EPA believes it is appropriate to provide an incentive for 
certification of such vehicles, since they are likely to operate on a 
cleaner fuel (e.g., gaseous fuel, with lower evaporative and refueling 
emissions) at least some of the time. While EPA cannot ensure that such 
vehicles operate on the cleaner fuel all of the time, the Agency 
believes that consumers who purchase dual-and flexible-fueled vehicles 
do so because they intend to operate on the cleaner fuel to the extent 
practicable, but wish to have the ability to operate on gasoline or 
diesel in the event refueling facilities for the cleaner fuel are not 
readily available at a particular time. Encouraging the certification, 
production, and market penetration of these vehicles will also support 
a broader refueling infrastructure for gaseous fuels, which benefits 
the clean fuel fleet program (since a number of clean fuel fleet 
vehicles are expected to be gaseous fueled vehicles). In addition, to 
the extent such vehicles are operated on gaseous fuels, environmental 
benefits are achieved through lower evaporative and refueling 
emissions. For these reasons, EPA is revising its current regulations 
for converted vehicles that can operate on gaseous fuels to provide for 
calculation of the one percent fee waiver based on the value added to 
the retail value of the vehicle, or engine, by the conversion. This 
calculation method will apply through MY 2003 (the same time period as 
the full fee waiver for clean fuel vehicles and Tier 1 dedicated 
gaseous fuel systems). While EPA believes this incentive in the form of 
a different calculation method for the one percent waiver is an 
appropriate incentive for encouraging the production of such vehicles, 
the Agency does not believe a full fee waiver is appropriate, since we 
cannot ensure that the vehicles will be operated on the cleaner fuel.

III. Projected Impacts

A. Environmental Impact

    Today's action will have no adverse effects on air quality, since 
all current emissions standards and requirements continue to apply to 
vehicles and engines affected by today's action. EPA believes that this 
action encourages manufacturers to develop and market vehicles and 
engines with innovative, new emissions control technology, ultimately 
resulting in broader market penetration of CFVs and clean alternative 
fuels.

B. Economic Impact

    By waiving certification fees for qualifying vehicles, this action 
reduces the regulatory burden on industry without adversely affecting 
air quality. EPA anticipates that the new provisions should result in 
environmental benefits through encouraging increased production and use 
of low emission vehicles and engines.

IV. Public Participation

    The Agency provided the opportunity for a Public Hearing for the 
proposed rule, if requested. No public hearing was requested. An 
extension of the comment period was requested and, in a Federal 
Register notice on September 11, 1998, the comment period was extended 
from August 19, 1998 to October 13, 1998. This Notice also informed 
interested parties that no public hearing had been requested.
    A total of twenty-eight comments were received. A summary of these 
comments and EPA's analysis and responses to those comments are 
contained in a separate Response To Comments document located in the 
Docket A-97-27.

V. Administrative Requirements

A. Administrative Designation and Regulatory Analysis

    Under Executive Order 12866 (58 FR 51735, October 4, 1993), the 
Agency must determine whether the regulatory action is ``significant'' 
and therefore subject to OMB review and the requirements of the 
Executive Order. The Order defines ``significant regulatory action'' as 
one that is likely to result in a rule that may:
    (1) Have an annual effect on the economy of $100 million or more or 
adversely affect in a material way the economy, a sector of the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local, or tribal governments or 
communities;
    (2) Create a serious inconsistency or otherwise interfere with an 
action taken or planned by another agency;
    (3) Materially alter the budgetary impact of entitlements, grants, 
user fees, or loan programs or the rights and obligations of recipients 
thereof; or,
    (4) Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
the Executive Order.
    It has been determined that this rule is not a ``significant 
regulatory action'' under the terms of the Executive Order 12866 and is 
therefore not subject to OMB review.

B. Regulatory Flexibility Act

    The Regulatory Flexibility Act, 5 U.S.C. 601-612 generally requires 
an agency to conduct a regulatory flexibility analysis of any rule 
subject to notice and comment rulemaking requirements unless the agency 
certifies that the rule will not have a significant

[[Page 11902]]

economic impact on a substantial number of small entities. Small 
entities include small businesses, small not-for-profit enterprises, 
and small governmental jurisdictions. This final rule will not have a 
significant impact on a substantial number of small entities because 
EPA is not imposing any new requirements, and any impact will be to 
reduce costs.

C. Paperwork Reduction Act

    The Paperwork Reduction Act, 44 U.S.C. 3501 et seq., requires 
agencies to submit for OMB review and approval, federal requirements 
and activities that result in the collection of information from ten or 
more persons. Information collection requirements may include 
reporting, labeling, and Recordkeeping requirements. Federal agencies 
may not impose penalties on persons who fail to comply with collections 
of information that does not display a currently valid OMB control 
number.
    Today's action does not impose any new information collection 
burden. The Office of Management and Budget (OMB) has previously 
approved the information collection requirements under the provisions 
of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. and has assigned 
OMB control number 2060-0104 (EPA ICR No. 0783).
    Burden means the total time, effort, or financial resources 
expended by persons to generate, maintain, retain, or disclose or 
provide information to or for a Federal agency. This includes the time 
needed to review instruction; develop, acquire, install, and utilize 
technology and systems for the purposes of collecting, validating, and 
verifying information, processing and maintaining information and 
disclosing and providing information; adjust the existing ways to 
comply with any previously applicable instructions and requirement; 
train personnel to be able to respond to a collection of information; 
search for data sources; complete and review the collection of 
information; and transmit or otherwise disclose the information.
    Copies of the ICR document(s) may be obtained from Sandy Farmer, 
OPPE Regulatory Information Division; EPA; 401 M St., SW (mail code 
2137); Washington, DC 20460 or by calling (202) 260-2740. Include the 
ICR and/or OMB number in any correspondence.

D. Unfunded Mandates Reform Act

    Section 202 of the Unfunded Mandates Reform Act of 1995 (signed 
into law on March 22, 1995) requires that EPA prepare a budgetary 
impact statement before promulgating a rule that includes a federal 
mandate that may result in expenditure by state, local and tribal 
governments, in aggregate, or by the private sector, of $100 million or 
more in any one year. Section 203 of the Unfunded Mandates Reform Act 
requires EPA to establish a plan for obtaining input from and 
informing, educating and advising any small governments that may be 
significantly or uniquely affected by the rule.
    Under section 205 of the Unfunded Mandates Act, EPA must identify 
and consider a reasonable number of regulatory alternatives before 
promulgating a rule for which a budgetary impact statement must be 
prepared. EPA must select from those alternatives the least costly, 
most cost-effective, or least burdensome alternative that achieves the 
objectives of the rule, unless EPA explains why this alternative is not 
selected or the selection of this alternative is inconsistent with law.
    Because this rule is expected to result in the expenditure by 
state, local and tribal governments or private sectors of less than 
$100 million in any one year, EPA has not prepared a budgetary impact 
statement or specifically addressed selection of the least costly, most 
cost-effective or least burdensome alternative. Because small 
governments will not be significantly or uniquely affected by this 
rule, EPA is not required to develop a plan with regard to small 
governments.

E. Congressional Review Act

    The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the 
Small Business Regulatory Enforcement Fairness Act of 1996, generally 
provides that before a rule may take effect, the agency promulgating 
the rule must submit a rule report, which includes a copy of the rule, 
to each House of the Congress and to the Comptroller General of the 
United States. EPA will submit a report containing this rule and other 
required information to the U.S. Senate, the U.S. House of 
Representatives, and the Comptroller General of the United States prior 
to publication of the rule in the Federal Register. This rule is not a 
``major rule'' as defined by 5 U.S.C. 804(2).

F. National Technology Transfer and Advancement Act

    Section 12(d) of the National Technology Transfer and Advancement 
Act of 1995 (``NTTAA''), Public Law No. 104-113, 12(d)(15 U.S.C. 272 
note) directs EPA to use voluntary consensus standards in its 
regulatory activities unless doing so would be inconsistent with 
applicable law or otherwise impractical. Voluntary consensus standards 
are technical standards (such as materials specifications, test 
methods, sampling procedures, and business practices) that are 
developed or adopted by voluntary consensus standards bodies. The NTTAA 
directs EPA to provide Congress, through OMB, explanations when the 
Agency decides not to use available and applicable voluntary consensus 
standards.
    This final rule does not involve consideration of any new technical 
standards.

G. Protection of Children

    Executive Order 13045, entitled ``Protection of Children from 
Environmental Health Risks and Safety Risks'' (62 FR 19885, April 23, 
1997) applies to any rule that: (1) Is determined to be ``economically 
significant,'' as defined under Executive Order 12866, and (2) concerns 
an environmental health or safety risk that EPA has reason to believe 
may have a disproportionate effect on children. If the regulatory 
action meets both criteria, the Agency must evaluate the environmental 
health or safety effects of the planned rule on children, and explain 
why the planned regulation is preferable to other potentially effective 
and reasonably feasible alternatives considered by the Agency.
    This final rule is not subject to Executive Order 13045 because it 
is not economically significant as defined in E.O. 12866, and because 
the Agency does not have reason to believe environmental health or 
safety risks addressed by this action present a disproportionate risk 
to children. To the extent this action encourages the certification and 
use of CFVs, as expected, any resulting effect on children's health 
will be positive through reduced emissions of certain pollutants, such 
as VOC's, NOX, and PM.

H. Enhancing the Intergovernmental Partnership

    Under Executive Order 12875, EPA may not issue a regulation that is 
not required by statute and that creates a mandate upon a State, local 
or tribal government, unless the Federal government provides the funds 
necessary to pay the direct compliance costs incurred by those 
governments, or EPA consults with those governments. If EPA complies by 
consulting, Executive Order 12875 requires EPA to provide to the Office 
of Management and Budget a description of the extent of EPA's prior 
consultation with representatives of affected State, local and tribal 
governments, the nature of their concerns, copies of any written

[[Page 11903]]

communications from the governments, and a statement supporting the 
need to issue the regulation. In addition, Executive Order 12875 
requires EPA to develop an effective process permitting elected 
officials and other representatives of State, local and tribal 
governments ``to provide meaningful and timely input in the development 
of regulatory proposals containing significant unfunded mandates.''
    Today's rule does not create a mandate on State, local or tribal 
governments. The rule does not impose any enforceable duties on these 
entities. This rule will be implemented at the federal level and 
imposes compliance obligations only on private industry. Accordingly, 
the requirements of section 1(a) of Executive Order 12875 do not apply 
to this rule.

I. Consultation and Coordination With Indian Tribal Governments

    Under Executive Order 13084, EPA may not issue a regulation that is 
not required by statute, that significantly or uniquely affects the 
communities of Indian tribal governments, and that imposes substantial 
direct compliance costs on those communities, unless the Federal 
government provides the funds necessary to pay the direct compliance 
costs incurred by the tribal governments, or EPA consults with those 
governments. If EPA complies by consulting, Executive Order 13084 
requires EPA to provide to the Office of Management and Budget, in a 
separately identified section of the preamble to the rule, a 
description of the extent of EPA's prior consultation with 
representatives of affected tribal governments, a summary of the nature 
of their concerns, and a statement supporting the need to issue the 
regulation. In addition, Executive Order 13084 requires EPA to develop 
an effective process permitting elected officials and other 
representatives of Indian tribal governments ``to provide meaningful 
and timely input in the development of regulatory policies on matters 
that significantly or uniquely affect their communities.''
    Today's rule does not significantly or uniquely affect the 
communities of Indian tribal governments. This rule will be implemented 
at the federal level and imposes compliance obligations only on private 
industry. Accordingly, the requirements of section 3(b) of Executive 
Order 13084 do not apply to this rule.

J. Executive Order 13132, Federalism Policies

    On August 4, 1999, President Clinton issued a new executive order 
on federalism, Executive Order 13132, [64 FR 43255 (August 10, 1999)] 
which will take effect on November 2, 1999. In the interim, the current 
Executive Order 12612 [52 FR 41685 (October 30, 1987)] on federalism 
still applies. This rule will not have a substantial direct effect on 
States, on the relationship between the national government and the 
States, or on the distribution of power and responsibilities among the 
various levels of government, as specified in Executive Order 12612.
    Today's rule does not create a mandate on State or local. The rule 
does not impose any enforceable duties on these entities. This rule 
will be implemented at the federal level and imposes compliance 
obligations only on private industry. Accordingly, the requirements of 
Executive Order 13132 do not apply to this rule.
    Executive Order 13132, entitled ``Federalism'' (64 FR 43255, August 
10, 1999), requires EPA to develop an accountable process to ensure 
``meaningful and timely input by State and local officials in the 
development of regulatory policies that have federalism implications.'' 
``Policies that have federalism implications'' is defined in the 
Executive Order to include regulations that have ``substantial direct 
effects on the States, on the relationship between the national 
government and the States, or on the distribution of power and 
responsibilities among the various levels of government.
    Under Section 6 of Executive Order 13132, EPA may not issue a 
regulation that has federalism implications, that imposes substantial 
direct compliance costs, and that is not required by statute, unless 
the Federal government provides the funds necessary to pay the direct 
compliance costs incurred by State and local governments, or EPA 
consults with State and local officials early in the process of 
developing the proposed regulation. EPA also may not issue a regulation 
that has federalism implications and that preempts State law, unless 
the Agency consults with State and local officials early in the process 
of developing the proposed regulation.
    Section 4 of the Executive Order contains additional requirements 
for rules that preempt State or local law, even if those rules do not 
have federalism implications (i.e., the rules will not have substantial 
direct effects on the States, on the relationship between the national 
government and the states, or on the distribution of power and 
responsibilities among the various levels of government). Those 
requirements include providing all affected State and local officials 
notice and an opportunity for appropriate participation in the 
development of the regulation. If the preemption is not based on 
express or implied statutory authority, EPA also must consult, to the 
extent practicable, with appropriate State and local officials 
regarding the conflict between State law and Federally protected 
interests within the agency's area of regulatory responsibility.
    This final rule does not have federalism implications. It will not 
have substantial direct effects on the States, on the relationship 
between the national government and the States, or on the distribution 
of power and responsibilities among the various levels of government, 
as specified in Executive Order 13132. This rule contains provisions 
for waivers of certification fees for certain manufacturers of new 
motor vehicles and engines. The requirements of the rule will be 
enforced by the federal government at the national level. Thus, the 
requirements of section 6 of the Executive Order do not apply to this 
rule. In addition, EPA provided state and local officials an 
opportunity to comment on the proposed regulations. A summary of 
concerns raised by commenters, including state and local commenters, 
and EPA's response to those concerns, is found in the Response to 
Comments document for this rulemaking.
    Although this rule was proposed before the November 2, 1999 
effective date of Executive Order 13132, EPA provided State and local 
officials notice and an opportunity for appropriate participation when 
it published the proposed rule, as described above. Thus, EPA has 
complied with the requirements of section 4 of the Executive Order.

VI. Statutory Authority

    Authority for the actions set forth in this notice of proposed 
rulemaking is granted to the EPA by sections 217, and 301(a) of the 
Clean Air Act as amended (42 U.S.C. 7552 and 7601(a))

List of Subjects in 40 CFR Part 86

    Environmental protection, Administrative practice and procedure, 
Confidential business information, Labeling, Motor vehicle pollution, 
Reporting and recordkeeping requirements.

    Dated: February 24, 2000.
Carol M. Browner,
Administrator.

    For the reasons set out in the preamble, chapter I, title 40 of the 
Code

[[Page 11904]]

of Federal Regulations is amended as follows:

PART 86--[AMENDED]

    1. The authority citation for part 86 continues to read as follows:

    Authority: 42 U.S.C. 7401-7671q.

    2. Section 86.908-93 is amended by adding paragraphs (a)(1)(iii) 
and (d) to read as follows:


Sec. 86.908-93  Waivers, and refunds.

    (a) * * *
    (1) * * *
    (iii) For converted vehicles that are dual- or flexible-fuel 
vehicles and can operate on a gaseous fuel, the full fee for a 
certification request for a MY exceeds 1% of the value added to the 
vehicle by the conversion, for MY 2000 through 2003.
* * * * *
    (d)(1) For model years 2000 through 2003, the required fees under 
this subpart shall be waived for any light-duty vehicle, light-duty 
truck, or heavy-duty engine family that meets the small volume sales 
requirements of Sec. 86.1838-01 and:
    (i) Is a dedicated gaseous-fueled vehicle or engine OR;
    (ii) Receives a certificate of conformity with the LEV, ILEV, ULEV, 
or ZEV emissions standards in 40 CFR part 88.
    (2) If the manufacturer does not receive a certificate of 
conformity with the LEV, ILEV, ULEV, or ZEV emissions standards in 40 
CFR part 88 as required in paragraph (d)(1)(iii) of this section, the 
fee requirements of this section will apply. Before any certificate can 
be issued, the applicable fee must be paid.
    (3) Manufacturers that have paid certification fees for model year 
2000 vehicle and engine families that meet the criteria in paragraph 
(d)(1) of this section may request a refund of such fees. EPA shall 
refund such fees if it determines that the vehicle or engine family 
meets the criteria of paragraph (d)(1) of this section.

[FR Doc. 00-5388 Filed 3-6-00; 8:45 am]
BILLING CODE 6560-50-P